I told friends this yesterday. We’re drawing live to a Reichstag Fire like consolidation of power, but we’re also drawing live to Trump’s removal. It’s all on the table. Part of the reason is that we may be a week away from him polling like 20 points behind Biden, and at some point the GOP realizes that:
He’s drawing dead in November.
He’s losing their donors billions of dollars in the markets.
He’s getting people killed.
(That’s the order in which they care.)
At this point, I think Pence > Trump for them, and it’s not even close. Slight concern for them that his supporters turn out to vote for primary challenges or whatever, but I think once Trump takes the markets from 29K to 18K or whatever, unemployment from effectively zero (like the current unemployment level is mostly turnover between jobs, long-term unemployment is probably absurdly low) to 10%, and once people are burying grandparents, the cult of personality is probably done.
He may try to go on TV and brag about taking the stock market to $29K, but like GJGE, it ain;t gonna stick at some point. That point only comes after immense pain and suffering to his base, and that’s where we are.
That is a powerful case for buy-and-hold being right for 99.99999% of people. Even if you can predict it and time it, how many people can make logical decisions while potentially losing massive amounts of money? Very, very few. As a former poker forum, some of us are uniquely wired for that.
Great post, I feel the same way. I’m going to make a lot of money off this, relative to my net worth, because I had been specifically preparing dry powder for a market crash. But I’m walking around my apartment today constantly on the verge of crying, literally my eyes have been welled up off and on the entire day. When the market has plummeted, I’ve been physically sick to my stomach.
Sure, yeah, I’ll make some money, that’s nice. I’d give it all back and 100% of my principal investment to save even a small number of the lives we’re going to lose. I care about my future wealth, but I’m a human being. The loss of live over this is going to be immense. I feel ill. If you put one of the people in front of me who’s going to die and said give me your net worth and they live, you’ve got it, take it, save them.
I can’t do that, I can’t go buy critical supplies and give them to a hospital because there are none left. I’m locked down, I can’t go out and help people without risking catching it myself. I live in a country where my chances of living long and being safe and relatively happy are intricately tied to my net worth. So I’ll do the right thing for myself here, but I won’t fucking dance.
A lot of people thought the markets were already a little overpriced due to the tax cuts → buybacks, low interest rates, etc… I hadn’t sold yet cause I’m not trying to time peaks, it made sense that those policies would keep driving it up, etc, but I think it’s very reasonable to say stocks were broadly overpriced. I don’t know if they were overpriced by 5% or 20%, but some chunk of this is attributable to that once the selling started.
We’re like 22-25% off peak right now, so it’s some mix of coronavirus and the markets already being overbought. There’s some fear-based selling in there too. I feel like given what’s happened when we hit the circuit breakers, it’s reasonable to say that every time something happens that should trigger a sell off of < 7% it’s just going all the way to the circuit breaker, then things sort of stabilize a bit… but there’s still a fear-based selloff included in this.
I have a feeling for the coming weeks, every time there is bad news we’ll take a big dip, we’ll have more losing days than winning days in the markets, but there will be some rallies in there too. The floor could be 20K, it could be 18K, it could be 15K, we could have a depression. I’m not going to try to time any of it, I’m buying VTI or VOO every time it drops another 2%. If I run out of dry powder and it keeps dropping, so be it, I’ll still have gotten a discount in the long run.
Oh, I also had a spare $110 in my Roth and DIS is at 92.xx. Gave myself the one share flyer instead of leaving it in cash. Damn near 40% off peak, stable major American company, perhaps less exposed to travel than some people realize.
This is very true. We already have a huge deficit so we may not be able to spend our way out of it, we’ve already cut taxes, so we can’t tax cut our way out of it.
A wealth tax could conceivably do it, but we won’t elect the people who would do it.
I expect this recovery to be a slow and painful one.
Don’t leave it all in cash, even if you don’t put it into the markets. There’s a big risk the US prints money to try to spend its way out of it. If you’re in euros, that’s probably safer. Best practice is probably any cash to be mixed between major currencies. I don’t know shit about that, so I won’t go any farther on it - just seems very logical to be diversified in cash holdings as well.
Selling now would be awful. It’s a classic terrible individual investor move. Don’t even look at your statements, don’t check the market, in 20 years it won’t matter at all.
We’ve had a few Biden (or other Dem) +10-11 in the last week or so, and that’s before this got bad. Maybe we don’t get to +20, but +15-17 is very possible when the body count starts going up drastically.
Yeah I wouldn’t even consider selling now. Buy more if you can, or hold. If you think it’s going lower and can’t bring yourself to buy now, line up dry powder in case you’re right.
Not calling a bottom, but think the goal should be to be fully invested no later 2 months from now, at that point none of the social distancing makes sense.
Some pretty smart friends are worried we could be having rolling lockdowns for a full year or so. Not going to happen, once we get past the “peak” even those that have been ringing the alarm bells for the last month or so are going to recommend just letting it run it’s course and being viligant.
If you are still planning to retire in 2050 or so, Vanguard 2050 Retirement Fund still seems like the most suitable investment. It says it right on the tin!
I agree, but we could easily have some form of rolling partial lockdowns - but they shouldn’t have much impact. Like, for example, let’s say we get past the first wave and then there’s a positive test in Chicago, they start contact tracing, and get like 10 tests. Chicago may say, hey, have everyone who can work from home for a couple weeks. Stagger work days a few hours in each direction to reduce public transit traffic. They could tell people to avoid eating out for a couple weeks, etc. Essentially, they would want to be 100% sure the new outbreak stays below hospitals’ thresholds before letting it go untethered.
I don’t think stuff like that will have any long-term impact on the economy, like it wouldn’t make me not want to buy-and-hold. It might have a short term impact on GDP the next 12-18 months, but nowhere near the magnitude of what we’ll see in the next 1-2 months nationwide.
This will be proposed in short order by the GOP. They’ll be urging austerity.
Novel idea to fight the novel coronavirus: stop dropping bombs in the Middle East for a year or two, spend the money here. Revisit then and see if we’ve learned any lessons about how to best spend our money.
I guess I just sit on these right, usually I just sell them right away.